What are the Application Fees for HUD 232 Loans?
Just like other kinds of financing, HUD 232 loans have certain application fees, including a HUD application fee, an FHA inspection fee, and lender application fees. Keep reading below to see the entire list of typical fees for HUD 232 loans.
Application Fees for HUD 232 Loans
Just like other kinds of financing, HUD 232 loans have certain application fees, including a HUD application fee, an FHA inspection fee, and lender application fees. Keep reading below to see the entire list of typical fees for HUD 232 loans.
What are the Typical HUD 232 Loan Fees?
Below is an outline of general fees for HUD 232 loans:
A non-refundable 0.3% HUD Application fee (0.3% of the loan amount)
0.5% FHA inspection fee (paid from loan proceeds)
Lender application fees for due diligence activities and third-party reports
Good faith deposit for commitment and rate lock (between 0.5% and 1% of the loan)
Funds for initial replacement reserves
Standard closing costs
What are the eligibility requirements for HUD 232 loans?
In order to be eligible for HUD 232 financing, properties need to meet a variety of eligibility requirements, including offering continuous care, being appropriately licensed, and having at least 20 patients. To take out a HUD 232 or HUD 232/223(f) loan, a borrower must typically have experience successfully operating one or more facilities of the same kind that they intend to build or purchase. In addition, a borrower must also be structured as a single asset, special purpose entity (SPE). Eligible borrowers may either be a for-profit or a non-profit entity.
For more information about FHA 232 loans, you can fill out the form to speak to a HUD/FHA loan expert.
What are the maximum loan amounts for HUD 232 loans?
There is no maximum dollar amount for HUD 232 loans. However, the mortgage amount is limited by loan guidelines. For new construction, the loan-to-value (LTV) ratio is 75% for for-profit entities and 80% for non-profit entities. For purchase and substantial rehabilitation, the LTV ratio is 75% for for-profit entities and 80% for non-profit entities. For substantial rehabilitation, the hard cost of the rehabilitation needs to be more than 15% of the project's post-rehab value, or, alternatively, two or more major building systems (i.e. plumbing or roofing) must be replaced.
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What are the interest rates for HUD 232 loans?
The HUD 232 program offers fixed interest rates. Actual rates depend on prevailing market conditions. For new construction or substantial rehabilitation, the interest rate is fixed prior to closing the initial construction loan and is interest only during construction.
HUD 232 loans have fixed interest rates. For HUD 232 construction loans, fixed interest rates are locked before construction begins, however, the construction period of the loan is interest-only.
What are the repayment terms for HUD 232 loans?
HUD 232 loans have a 10-year minimum, full amortizing repayment term. The loan term can be up to 40 years for new and rehabilitated properties, and up to 35 years for non-rehab acquisitions that can be funded with Government National Mortgage Association (GNMA) Mortgage Backed Securities. The annual MIP is 0.65% of the entire loan amount.
What are the security requirements for HUD 232 loans?
The security requirements for HUD 232 loans are outlined in Chapter 14 of the Healthcare Mortgage Insurance Program Handbook (4232.1). Generally, each property must be covered by property and liability insurance for the duration of the loan. The first year’s premiums must be paid in full at closing. In addition, borrowers must provide their lenders with evidence of insurance on or before the closing date or before the policy’s renewal date.